Opposing groups agree on taxes in Worcester

Friday

Nov 30, 2012 at 6:00 AM

By Nick Kotsopoulos TELEGRAM & GAZETTE STAFF

In an unprecedented move, the Worcester Regional Chamber of Commerce and the Shrewsbury Street Neighborhood Association have come together and agreed on a set of tax rates for Tuesday night’s annual tax classification hearing.

The two groups, which have held diametrically opposing views on the tax rates for several years, will be pushing for adoption of a set of rates that will increase the annual tax bills for both residential and business property owners by roughly 4 percent for the current fiscal year, which ends next June 30.

The tax rates being recommended by both groups is a residential rate of $18.50 per $1,000 valuation and a commercial-industrial rate of $30.58.

In comparison, the tax rates for the last fiscal year were $16.98 for residential properties and $29.08 for commercial-industrial properties.

According to the city assessor, the tax rates recommended by the two groups would increase the average annual tax bill for homeowners to $3,214, or about $124 more than the average for the previous fiscal year.

Meanwhile, the average annual tax bill for business property owners would go up to $8,084, which is $314 more than last year’s average.

The annual tax increase for homeowners would be 4.02 percent, while for business owners it would be 4.04 percent, according to the city assessor.

The rates would also maintain the same percentages of the burden of the city’s overall tax levy for the two major classes of property: 60 percent for residential and 40 percent for commercial-industrial.

“This is a significant step in the direction of progress with the community, residents and businesses, working together to improve our city,” said Richard B. Kennedy, president and chief executive officer of the Worcester chamber.

Gary J. Vecchio, president of the Shrewsbury Street Neighborhood Association, said the agreement was not a case of either party backing down from its long-held position on the city’s tax structure.

Instead, he said it is something both believe is in the best interest of all in the city.

“The chamber has been a voice for businesses for many years, as I have tried to be a voice for the residents,” Mr. Vecchio said. “Now, we can both be voices for the community of Worcester. This rate ensures that both sides share equally in helping to provide for the needs of city government.”

For years, Mr. Vecchio has lobbied the City Council to adopt the lowest possible residential tax rate because he felt homeowners needed some form of relief from their ever-rising property assessments.

But the lowest residential tax rate is something the chamber of commerce has always fought against, because such a rate for homeowners translates into the highest possible tax rate for commercial and industrial property owners. As a result, whenever the council adopted the lowest residential tax rate, business owners were often hit with significant tax increases.

Meanwhile, the chamber of commerce has been seeking a more favorable tax structure for businesses by pushing for tax rates that would shift more of the tax burden from business owners to homeowners. It points out that while commercial and industrial properties account for only 28 percent of Worcester’s overall tax base, business owners fund through their property taxes 40 percent of the city’s tax levy.

The chamber’s goal has been to gradually close that gap between residential and business properties and eventually do away with the dual tax-rate system and go back to a single tax rate for the city.

But Mr. Vecchio and other neighborhood leaders have strongly opposed that, saying it would place a significant tax burden on homeowners and especially put a financial strain on those living on fixed incomes.

Buoyed by the successful conversations between the chamber of commerce and the Shrewsbury Street Neighborhood Association, several others have joined in the support of the tax rates they are recommending.

Others in support are: the Worcester Citizens for Business; William T. Breault, chairman of the Main South Alliance for Public Safety; the Shrewsbury Street Merchants Association; Edith Morgan; the Webster Square Business Association; Leonard Ciuffredo; and James Magay of the Lincoln Street Area Business Association.